Greece: The One That Got Away

Protester throws a stone during demonstration at anti-austerity rally.

In the days before Lehman Brothers collapsed, I spent hours on the phone with various officials of the U.S. government. All of them had the same message: there won't be a bailout of Lehman.

The market did not believe it. Almost every executive on Wall Street that I spoke to believed that the government would step in to prevent a bankruptcy at Lehman. That just seemed to be the smart, rational thing to do.

And now we're seeing the same thing with Greece.

Everyone understands that a Greek default would be horrific. And so everyone assumes that some gang of government operatives will step in to prevent it from happening.

Don't count on it.

Sometimes the irrational, unexpected, unbelievable event occurs. It doesn't matter that it shouldn't happen. It doesn't matter that it doesn't have to happen. It doesn't matter that it could be avoided.

There may still be a way to rescue Greece. But the price of rescuing Greece rises daily. And the odds get longer and longer.

Will Greece be the next Lehman? Only if we respond to the Greece crisis the same way many responded to the Lehman crisis: by assuming the worst wouldn't, couldn't happen.